28 Dec The Core++ approach to digital banking

Customers switch their primary bank twice as much in emerging markets compared to developed markets over the course of a year according to a Bain study conducted last year. Interacting seamlessly with a customer based around their increasingly digital life will be at the heart of both customer acquisition and customer retention. Enabling online banking thus should be a core agenda for the modern bank.

Whenever we work closely with banks on transformational projects the digital banking roadmap question comes up since we have to reverse engineer a technology ecosystem to enable it. But what is online banking? Is it basic account management? Is it enablement of key services? We’ve found that the answer varies with the key focus area of a bank but the core of the online experience stays the same. Keeping this in mind our approach to online banking is a Core++ approach where four basic account services form the core but additional services are based on a bank’s strategic positioning and will vary for a bank that is government owned, one focused on trade finance, one focused on consumer banking and so on.

The core: Unquestionably the four banking services customers expect to use online and are already most used online in developed markets are looking at transactions, viewing balance and statements, paying bills and transferring money. These should form the heart of your online banking and should be the bare minimum of what you offer. You do not have online banking if you do not have all four of these services!

Other services: Here is where it gets interesting. We find those banks that are razor focused on the type of customers they wish to acquire, strategically clear on what sort of bank they wish to be and what they should mean to the customers can use differentiation via online banking services they offer to great effect. For example the first service a fanatically customer service focused bank will launch after or along with the core services is live support on a channel of the customer’s choice. Remember mobile is the fastest growing channel in banking history. So this will mean live chat via mobile or web, messaging options, email or sms alerts and single sign on across multiple channels.

Banks focused on trade finance may offer a robust online advice section with basic analytic tools after extensive professional user experience (UX) testing. Consumer banking focused banks may offer home/ car loan calculators or related tools including related guides on how to get started buying the new dream house and car. They may even go to the extent of investing in a team that manages latest related information on site in a helpful informative portal. Others may offer personalization for premium or business customers with everything from investment to tax advice.

InfoTech is enabling multiple large banks with everything from core banking, to journey to the cloud to transformational re-engineering. We find that banks who outperform their peers are customer centric and their digital banking initiatives reflect a Core++ approach derived from the attributes their customers have.

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